Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- The Boeing 767 Cross Section, Part 1 November 24, 2022
- Movie Review: Devotion November 21, 2022
- China will accelerate development of its commercial aerospace sector November 21, 2022
- Bjorn’s Corner: Sustainable Air Transport. Part 46. eVTOL comparison with helicopter November 18, 2022
- The economics of a 787-9 and A330-900 at eight or nine abreast November 16, 2022
France to invest 15 billion Euro in its aeronautical industry
By Bjorn Fehrm
June 10, 2020, ©. Leeham News: France presented a 15 billion Euro support plan for the French aeronautical industry yesterday, to help the industry overcome the effects of the COVID-19 pandemic.
The plan has three focus areas:
- safeguard the employment of the 300,000 employed in the French aero industry
- transform the supplier network to a more robust structure
- and perhaps most interesting, set the direction for the industries’ next aircraft projects
The French Finance Minister announces the plan. Source: France 24.
Embraer announces a first Quarter 2020 loss of $292 million
By Bjorn Fehrm
June 1, 2020, ©. Leeham News: Embraer presented its 1Q2020 results today. It lost $292m (vs. loss of $43m 1Q2019) on revenues of $634m ($823m).
The reason is the COVID-19 crisis and halting commercial jet production during January, to prepare for the Boeing Joint Venture. It halved the 1Q2020 revenue of Commercial aircraft to $141m versus $281m last year.
The Executive jet segment is recovering, however. Its 1Q2020 revenue was $130m versus 117m 1Q2019, an 11% increase despite delivering fewer jets. The reason is high-end deliveries are now strong after several years of slump.
The separation costs for the canceled Boeing Joint Venture during 1Q2020 was $22m. The 1Q2020 results include $55m of special items due to the impacts of COVID-19. Embraer lowered the fair value of its stake in Republic Airways Holdings with $22m and made bad debt provisions for weak airliner customers of $33m.
Arbitration proceedings with Boeing have started for the canceled Comercial airplanes Joint Venture agreement and the KC-390 Contribution agreement. Embraer said in the quarterly presentation call it would be open to new cooperation agreements but had nothing new to tell on the subject.
The Company has $2,501m of Cash exiting 1Q2020 with first debt maturing in 2022. Given the present crisis for Civil aviation, guidance for 2020 is suspended.
US carriers not at imminent risk of bankruptcy despite potential shutdown
By Judson Rollins
March 16, 2020, © Leeham News: Throughout Sunday afternoon and evening, reports – all unconfirmed – began to emerge in the US that as early as today, the Trump administration may announce a suspension of US passenger flights domestically for 2-4 weeks. The suspension, if confirmed, could begin this week. Investors are scrambling to understand how long US airlines can survive on their current cash balances.
LNA reviewed the balance sheets of carriers worldwide in anticipation of such dramatic events. In this article, we will show that US airlines have plenty of time for demand to recover – or the US government to step in with emergency loans or grants similar to those doled out by the Air Transportation Stabilization Board from 2001 to 2003.
This airplane line-up at Chicago O’Hare Airport could be a thing of the past very soon. Source: Pinterest.
European airline struggles add risk to 15% of Airbus, Boeing orders
By Judson Rollins
Subscription Required
Introduction
Earlier this week, LNA examined the potential for a shakeout among European carriers as the coronavirus outbreak spreads to the continent.
Five European countries now rank among the ten hardest hit – travel demand is plummeting nearly as rapidly as after the September 11 attacks in the US.
On Thursday, UK-based Flybe went into bankruptcy after long-time financial struggles. The airline had 54 De Havilland Canada Dash-8-400s and nine Embraer E175-E1s in its fleet, more than half of which were leased from Nordic Aviation Capital and HEH Aviation Management.
LNA reviewed aircraft ownership data to understand top manufacturer and lessor exposure to European carriers, particularly those with known profitability issues and high debt loads.
Source: Twitter / @AirportWebcams
Summary
- Airbus’s exposure to Europe is 16% on single-aisles and 19% on twin-aisles;
- Boeing has just under 15% of its single- and twin-aisle orders from Europe;
- Embraer’s E2 jet program has 27% exposure to the region;
- ATR, De Havilland Canada, COMAC face little to no threat from European airline woes;
- Norwegian, TAP, SAS, TUI are likely the most imminent threats to manufacturers and lessors.
Pontifications: The nuts and bolts of air disasters
March 9, 2020, © Leeham News: Commercial aviation accidents are high profile news events.
By Scott Hamilton
These happen rarely. Many times, a lot of people are killed. (It should be noted that often survivors may outnumber those killed as safety improved.)
In this era of 24/7 cable news and minute-by minute social media, everyone wants instant answers as to causes.
Finding answers is not simple. A typical accident investigation usually takes 12-18 months before the investigators issue a final report with a probable cause.
One reason for this is that sometimes, the cause of an accident comes down to a single bolt, or even a single cotter pin.
This is where the new book, Flight Failure, Investigating the Nuts and Bolts of Air Disasters and Aviation Safety, serves to remind us of just how intricate accident investigation is.
Airbus to deliver 251 tonnes version of A330-900 by mid-year
By Bjorn Fehrm
March 3, 2020, ©. Leeham News: Airbus has started the additional flight testing needed to certify the 251t version of the A330-900. It needs to verify the handling of the aircraft at the higher weight allowed by a 251t MTOW (Maximum Take-Off Weight, up from 242t for today’s A330-900).
The flight test campaign is short, about 40 hours in all. This allows for certification and first deliveries by mid-year. The smaller A330-800 will certify the 251t version next year.
Asian airline troubles could affect up to 20% of Airbus, Boeing backlogs
By Judson Rollins
Subscription Required
In last week’s analysis, LNA examined which airlines in greater China and the rest of Asia may be in imminent risk of financial distress due to the growing coronavirus outbreak. We found that airlines from Malaysia to Japan have significant exposure to the Chinese market. Several have shaky balance sheets and were already losing money prior to the outbreak, most notably AirAsia, AirAsiaX, Thai Airways, Nok Air, Malaysia Airlines, and Asiana.
The coronavirus outbreak has now spread to Europe and the Middle East, but we are continuing our focus on Asia as it’s been most greatly affected so far. Additional analysis focusing on Europe will follow, with particular attention to the potential for further airline consolidation on the continent.
LNA reviewed ownership and operating data on aircraft to understand top manufacturer and lessor exposure to greater China, which includes Hong Kong and Macau, and the rest of East Asia.
Summary
- Airbus has greater exposure to China and the rest of East Asia, especially in widebodies;
- Boeing’s 787, 777X difficulties will be exacerbated by Asian airline troubles;
- COMAC’s sales book is almost exclusively in China, but government support is likely;
- ATR has material exposure to Southeast Asia; other regional aircraft OEMs are largely unaffected.
Bjorn’s Corner: Why e in ePlane shall stand for environment, Part 10. The problem in perspective.
February 21, 2020, ©. Leeham News: After spending several Fridays looking at different possibilities and technologies that can lower air transport’s environmental footprint we now turn the discussion to what path forward makes sense and how shall we set our priorities.
Figure 1. The CO2 concentration in the atmosphere and what causes it. Source: Wikipedia. Click to see better.
Airbus buys Bombardier’s share in A220, now sole owner together with the Government of Quebec
By Bjorn Fehrm
February 13, 2020, © Leeham News in Toulouse: The news this morning that Airbus is now the sole owner of the A220 (75%) together with the Government of Quebec (25%) is good news for the A220 and for Quebec.
Bombardier is a company in trouble and it was forced to try and save cash in the A220 partnership rather than invest in the future. This potential limitation on the A220 program is now resolved. Airbus gets sole responsibility for future plans and it has in the Government of Quebec a partner that will be positive to the growth of the A220 as it means more business for the Quebec aeronautical industry.
Bjorn’s Corner: Why e in ePlane shall stand for environment, Part 8. Hydrogen.
February 7, 2020, ©. Leeham News: After discussing established ways of improving the environmental footprint of our air transport system and highlighting the challenges involved with an electric/hybrid route we now look at hydrogen as an alternative energy source.
We will quote from a study series made by Airbus at the turn of the century. It’s today 20 years old but its ideas and conclusions are more relevant than ever.
Figure 1. Hydrogen powered airliner from Airbus study. Source: Airbus study presentation.